intellectual property legal expenses insurance · brands need to be protected from exploitation and...
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Intellectual property legal expenses insurance
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Delta’s dedicated IP insurance offering has been designed to make it easy for Singapore companies to cover their legal costs in a court battle over intangible assets.
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Singapore ranked fifth most innovative country amongst 126 nations in the Global Innovation Index (GII) 2018 report. R&D expenditure rose by 47% since 2010 to reach $9,519m in 2016, as Singapore businesses capitalised on innovation to keep them ahead of their competition. With the government support, Government commits S$19b to new 5-year plan for R&D initiatives RIE2020.
Intellectual Property insurance helps Singapore companies unlock the potential
of their IP through covering legal expenses to help them deal with infringement
or enforcement related issues.
A 2016 study of 900 local companies found that more than one-third of their
assets were intangibles, up from 20 per cent in 2010.
As our knowledge-based economy grows, Singapore’s most valuable ideas and
brands need to be protected from exploitation and intellectual property (IP)
risks. Singapore products are increasingly being devalued by knock-offs and
trademark theft - part of a global trend of illegal competition.
A first for Singapore
Delta’s dedicated IP insurance offering has been designed to make it easy for
Singapore companies to cover their legal costs in a court battle over intangible assets.
Until now, no single policy in Singapore has adequately covered intellectual property
to help businesses deal with infringement and enforcement-related issues.
Having an insurance policy that covers legal expenses gives financial confidence to
companies to manage risks in an effective way.
An IP policy helps Singapore companies to realise the value of their IP while they
commercialise their ideas with confidence.
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Having an insurance that covers legal expenses allows businesses to swiftly respond to difficult situations they may encounter while commercialising their IP.
> Protect your financial resourcesThe policy protects the financial position of your
company by reimbursing you for the legal
expenses you incur while defending or enforcing
your IP.
> Unlock the potential of your IP Licensing is a common way of commercialising the
IP. The policy helps in attracting larger licensees
who often demand indemnification against
infringement disputes arising out of use of your IP.
> Comfort investors and lendersHaving this policy reassures investors and lenders
that the business is well equipped to face
infringement disputes. It makes them confident
that the funds they are providing would be used to
grow the company rather than fending off legal
issues related to its IP.
IP coverage and claims examples
Defence Cover for Infringement DefencePays for legal expenses to defend an allegation of
infringement against you.
Example
The insured recently secured a patent for an
advanced tractor suspension system. Whilst the
insured is a relatively new and fast-growing
company, they were careful to do their research
before bringing the product to the market. Their
patent agent conducted extensive searches and
freedom to operate advice was received.
However, following adoption and agreement of
exclusive use licences with a major tractor
manufacturer, a cease and desist letter was received.
The insured felt that the action against them was
groundless and thus was prepared to strenuously
fight any allegation of infringement. The insured was
covered by the Legal Expenses Insurance for the
SGD 57,000 of legal costs incurred in defending the
allegations and subsequently had their patent
validated by the Court.
Pursuit Cover for Infringement PursuitPays for legal expenses to pursue a third party for an
allegation of infringement of your intellectual property.
Example
The insured, an exporter of Manuka honey, uses its
registered trademark as a branding tool as well as a
certification mark to show potential customers that
the product meets strict quality standards and
regional authenticity. Following receipt of
information that an unauthorised company was
using the trademark on their packaging, the insured
felt they must undertake cease and desist measures.
The insured engaged lawyers to prevent the
unauthorised user from continuing to use the
trademark and sought damages. Following initial
resistance, court proceedings followed. The insured
was ultimately successful and managed to recover
some 35% of the legal costs incurred. However, the
remaining amount of the SGD 36,000 incurred were
covered by the Legal Expenses Insurance and
further abuse of the trademark was prevented.
Revocation Cover Pays for legal expenses to defend an action
disputing the legitimacy of your intellectual property.
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Contractual dispute protection for Licensee PursuitPays for legal expenses you incur because of a
dispute with a licensee over the use of your
intellectual property.
Example
The insured agreed with a distributor to grant an
exclusive licence to manufacture trademarked toys
in China for later distribution in the Singapore
market. The licensee was granted a twelve-month
exclusive intellectual property usage and
manufacturing agreement. Part-way through the
contract the insured discovered the manufacturer
was also distributing the toys in the Chinese market.
The insured was forced to seek a replacement
manufacturer to maintain exclusivity and
manufacturing standards. The insured was covered
by the Legal Expenses Insurance to pursue for the
additional costs of working incurred and breach of
intellectual property rights, obtaining an out of
court settlement.
Protection of exclusive licensee for Licensee DefencePays for legal expenses you incur to defend an
infringement allegation against your licensee arising
out of use of your intellectual property.
Example
The insured granted their patented solution to a
major semi-conductor manufacturer in Taiwan.
Following many years of partnership, a new entrant
came in to the market. The new entrant began
proceedings against several Taiwan based semi-
conductor manufacturers for alleged breaches of a
patent portfolio they had acquired recently, in
addition to their own innovations. Not only were they
seeking damages but also revocation of the alleged
infringers’ patents.
Whilst the licence agreement did not specifically
require the insured to indemnify the licensee for any
infringement defence costs, given the close and
profitable relationship that the insured and licensee
held, the insured was happy to assist the licensee in
their infringement defence.
The insured was indemnified for the costs incurred
by the licensee, as well as their own defence of
revocation costs, by the Legal Expenses Insurance.
This amounted to some SGD 143,000, although
some limited recovery of costs was later achieved.
Public relations expensesPays for public relations expenses arising out of
covered disputes under scenarios listed above.
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